The eCommerce industry is full of sudden expenses and hidden costs especially when it comes to the logistics part. Such costs may include the signup fee, costs for COD services, bulk shipments, return shipment costs, etc. The progress of an eCommerce business is measured not only by customer satisfaction but also by how well its logistics expenses are managed. When it comes to balancing your logistics expenses and business profit, there are a few clear-cut ways that can help you keep the costs low. Let’s have a look at the key tips to reduce eCommerce logistics costs.
Choose the right logistics partner
Several types of costs are involved in logistics, such as labour charge, packaging cost, fuel surcharge, insurance amount, and others. It’s important to ensure all the costs are discussed beforehand while choosing a logistics partner for your business. Discussing these details in advance will ensure you pay the lowest cost for your required services.
Reduce delivery delays
Delay in delivery is one of the biggest reasons behind indirect logistics costs, such as increased warehousing fees, cancellation charges, and transportation costs. You can avoid paying these costs by putting a stop to delivery delays. For this, you will have to proactively identify the causes for delivery delays and work on reducing them with strategic measures.
Reduce stuck shipments
Stuck shipments are another reason for increased logistics costs. Stuck shipments are the deliveries that get stuck at a storage facility or during transit. Stuck shipments are very likely to get cancelled or may get lost in transit as well. It’s important to identify the reasons behind stuck shipments and address them carefully to handle the deliveries efficiently.
Reduce the RTO
Besides increasing a seller’s logistics costs, stuck shipments and delayed deliveries have another thing in common. They both cause a high RTO percentage. While it takes multiple failed delivery attempts for a shipment to fall under the RTO category, fake delivery reports by unreliable courier partners are a common cause behind increased RTO. Other reasons for failed deliveries may include an incorrect address or contact number provided by customers. One good way to reduce the RTO percentage is by creating an efficient NDR system to automatically notify the customers and sellers in case of a failed delivery attempt. Providing real-time access to the NDR panel will enable the sellers to check the real cause behind the fake delivery report, and he/she can immediately act on it to reduce their RTO percentage. Another good way to overcome the high RTO issue is partnering with a trusted courier partner to offer timely deliveries to the customers and reduce fraudulent delivery reports. NimbusPost brings 17+ local and national courier partners to one platform. You can choose a shipping partner that offers the best shipping rate for delivery to a particular pin code.
Optimise the return process
Returns requested by the customers is another reason that adds to the overall logistics costs. Whether customers receive incorrect or damaged items, or there is inefficient tracking, all this can lead to returned items getting lost while reaching the original warehouse. That’s why it’s important to put attention to detail for an optimised return process.
The best way to manage the costs associated with reverse logistics is to associate with a logistics partner that is fully equipped with an efficient reverse mechanism. Many leading courier partners offer doorstep quality check facilities to ensure the products return to the origin warehouse safely.
Negotiate with courier partner
Paying an unreasonably high amount for any service adds up to unnecessary expenses of a business. For eCommerce businesses, the only way to grow is with help of their respective logistics partners. As an eCommerce seller, you should communicate with your logistics partner to identify different KPIs and figure out what mistakes have been made in past and where you can improve as a business. Based on the review of your business progress, you can also renegotiate your contract by placing limits on different KPIs. For example, if you have set an upper limit on the number of stuck shipments per month and your courier partner crosses that limit, you can negotiate for better rates or even shift to a more promising courier partner out there.
Poor logistics planning can often result in increased costs, delayed deliveries, or damaged goods. Since all these are red flags, it would be best to partner with a reliable shipping aggregator like NimbusPost to overcome every inconvenience and reduce eCommerce logistics costs.